Bloomberg (31/12) -- Gold headed for the biggest slump in three decades and the first annual loss since 2000 as an improving economy cut demand for wealth protection. Silver was set for the worst annual performance since 1981.
Bullion fell 28 percent this year to $1,198.48 an ounce by 8:49 a.m. in Singapore. Investors lost faith in the metal as a store of value amid an equity rally and as an economic recovery prompted the Federal Reserve to pare its $85 billion in monthly bond purchases. Sales of 864.8 metric tons from gold-backed exchange-traded products in 2013 were more than combined inflows in the previous three years, data compiled by Bloomberg show.
Gold assets were 1,767.1 tons on Dec. 27, down 33 percent in 2013 after expanding all year since the first product was listed in 2003. About $73.7 billion was erased from the value of holdings as prices sank, data compiled by Bloomberg show. The SPDR Gold Trust, the biggest gold-backed ETP, fell 41 percent this year to 798.22 tons yesterday, the lowest since 2009, according to data on the funds website.
Silver slumped 35 percent in 2013, the second-worst performer in the Standard & Poors GSCI gauge of 24 commodities. Platinum dropped 12 percent as palladium advanced 1 percent.
Holdings in ETPs backed by silver advanced 2.4 percent this year and were at 19,377.5 tons yesterday, according to data compiled by Bloomberg. Palladium assets climbed 15 percent, while platinum holdings surged 71 percent, data show.
Silver for immediate delivery gained 0.4 percent to $19.6618 an ounce. Platinum advanced 0.2 percent to $1,358.80 an ounce, while palladium rose 0.2 percent to $710.90 an ounce.